Zhong Tong Finance APP learned that on Thursday morning Beijing time, Meta Platforms (META.US) announced Q2 revenue and profits better than expected, and the stock price rose, despite the company's statement that its spending on technology, especially artificial intelligence (AI), will continue to increase slightly.

Data shows that the company's Q2 revenue increased by 22% year-on-year to $39.07 billion, better than the market's expected $38.31 billion; EPS was $5.16, easily exceeding the market's expected $4.78.

Meta expects Q3 revenue to be between $38.5 billion and $41 billion, while the market expects $39.2 billion.

Previously, the company raised its spending expectations for the year in its Q1 report, after which investors focused on the company's spending guidance. Meta currently expects capital spending to increase from $35 billion to $40 billion in 2024 to $37 billion to $40 billion, while the market still expects $37.6 billion.

The company also said that capital spending is expected to see a "significant" increase in 2025.

Founder and CEO Mark Zuckerberg said, "We had a strong quarter, and Meta AI is expected to become the most used AI assistant in the world by the end of the year." "We have released our first cutting-edge open-source AI model, and we continue to see the Ray-Ban Meta AI glasses as attractive, and we are driving good growth in our applications."

In terms of profit indicators, Meta's Q2 operating profit increased by 58% to $14.85 billion, and the operating margin jumped 9 percentage points to 38%. Net income rose 73% to $13.5 billion.

In terms of operating indicators, the average year-on-year growth of home daily active users (DAP) in June was 7%, reaching 3.27 billion people, exceeding the market's expected 3.22 billion people. Ad impressions increased by 10%, and the average price per ad also increased by 10%. Average revenue per user (ARPP) was $11.89, up 14% year-on-year.

Alex King, an analyst at investment research firm Cestrian Capital, said, "In my opinion, the company's performance for the quarter was steady but not explosive. Revenue growth slowed to 22% from the same period last year, the first deceleration since the December 2022 quarter. The performance of ad technology company Pinterest (PINS.US), which released its results yesterday, also showed a similar deceleration, indicating overall weakness in ad spending."

He pointed out that the cash flow profit margin fell by one percentage point, mainly due to increased capital spending (currently accounting for 21% of revenue), but "the balance sheet is still strong, with net cash of about $40 billion. The company's valuation is 22 times the unlevered pretax free cash flow in the past 12 months and is not expensive."

Julian Lin, an analyst at Seeking Alpha, said, "In the wake of yesterday's Pinterest panic, the market seems to have breathed a sigh of relief, with Meta's guidance exceeding market expectations while still showing amazing profit margin growth."Meta"continues to invest heavily in Reality Labs and its AI infrastructure, which clearly has not hindered profit growth or share buyback plans."

As of the time of writing, Meta's after-hours trading rose 7.54% to $510.62.